Oracle has canceled a roughly $7 billion chip leasing deal with Chinese tech giant Tencent following pressure from the Trump administration, according to the Financial Times.
The U.S. cloud computing giant had signed a five-year agreement to lease up to 100,000 advanced AI chips to Tencent across its data centers in Southeast Asia, the FT reported last month. The deal was estimated at $7 billion.
However, U.S. officials have since approached Oracle to raise concerns about the Tencent deal, the outlet reported Wednesday, citing sources familiar with the matter. Chinese top officials also reportedly urged Tencent to support domestic chips during a visit to the company's office in Guangdong province in southern China.
The Latent has reached out to Oracle and Tencent for comment.
AI rivalry
The canceled deal comes amid an intensifying technology rivalry between China and the U.S., particularly surrounding AI development.
Washington has long limited China's access to certain high-end AI chips and chipmaking equipment through export controls, and Chinese firms have thus turned to overseas cloud leasing arrangements. Some Chinese companies have also reportedly obtained chips through smuggling networks and black markets.
On Tuesday, the FT also reported that Nvidia has told its global data center partners to reduce their exposure to Chinese clients. Nvidia has instructed its cloud computing customers in recent months to ensure that they sell at least 51% of their services to non-Chinese companies.
Meanwhile, Chinese authorities and companies have also stepped up efforts to develop homegrown AI technologies, while pushing to expand the global reach of their AI models. Last month, Chinese AI firms DeepSeek and MiniMax received regulatory approval to deploy their models overseas, according to Chinese state media.